Critics Take Aim at More Lenders

Two consumer advocates who brought the nation's largest subprime servicer, Fairbanks Capital Corp.,
to its knees, are preparing to target other subprime servicers if they are not willing to reform their practices.

"There are a lot of dirty servicers out there," said Craig Kenney, a former corporate meeting producer who became a
consumer advocate as a result of his run-in with Fairbanks.

But he wants to clean up the subprime servicing sector. "Bring it up to the point where it can be trusted and have
some integrity."

His colleague, Brian Barr, said there are 16 subprime servicers that have issues that are similar or exactly the same as
Fairbanks. Some are open to reform, but others aren't.

"We believe in the subprime category. We want it to exist. But reform is absolutely necessary," he said. Mr. Barr is a
servicing and REO expert who sued Fairbanks over a contract dispute.

The two reformers stress that they don't want to kill the companies they target. Their goal is to move the companies
away from a business model that is based on taking advantage of borrowers who get behind in their payments.

And they want to eliminate the "misery profits" that servicers, title companies and other vendors reap from defaults
and foreclosures.

"We are going to put pressure on the servicers to reform, and the investors to reform the compensation packages,"
Mr. Barr said in an interview.

The way compensation packages are currently structured, "it is good business to foreclose on a property," Mr. Barr
explained, because of the fees it generates, which are paid out of the borrower's equity.

He has been meeting with members of Congress and regulators to educate them and show them how it works. "They
don't understand subprime servicing," he said.

The two reformers are very proud of their success in pressuring Fairbanks to change.

The company's majority shareholders (The PMI Group, Walnut Creek, Calif., and Financial Security Assurance,
New York) stepped in to replace the management and agreed to change Fairbanks servicing practices.

As part of this commitment to change, Fairbanks extended an olive branch to Mr. Kenney and Mr. Barr. They
entered into a settlement agreement with the two critics, who are now overseeing the reforms.

Mr. Kenney said he receives a $1 retainer fee from Fairbanks. Mr. Barr declined to comment on the compensation he
receives from Fairbanks.

"I truly believe they are 1,000% committed to cleaning up this mess," Mr. Kenney said in a separate interview.

He said it is also important that Fairbanks has secured the necessary financing to remain viable so it can move ahead
and resolve borrower's problems.

"If they fail, those loans are simply going to be transferred to another servicer" and the borrowers problems are
"going to start all over again," he said.

Mr. Barr noted that the reform process is "painful," but Fairbanks is moving ahead. "I have seen dynamic
improvement in that institution since it made the management changes."

Mr. Barr is hopeful that other servicers will see the light and agree to cooperate.

The two reformers waged a two-year public relations campaign against Fairbanks that drew the attention of the
media, members of Congress and federal investigators.

The Salt Lake City-based company is currently under investigation by the Federal Trade Commission and the
Department of Housing and Urban Development, which are examining its servicing practices.

An important weapon in their attack was a website (conti-fairbanks.com) which labeled the troubled servicing
company as "America's Poster Child for Mortgage Abuse."

The website posted consumer complaints, news stories and litigation filed against Fairbanks Capital Corp. Fairbanks
sued to close it down.

Today, the duo operate a new website called BorrowerHelp.com that is "dedicated to helping borrowers resolve their
differences with Fairbanks."

The Web managers note that they have direct contact with the new management at Fairbanks, but they remain a
"completely independent voice" for the borrowers.

"Kenney, Barr, and this site are here to help borrowers, and where necessary and appropriate, step in to ensure that
all issues are resolved," the opening page of the website says.

Mr. Kenney ran into problems with Fairbanks shortly after the company took over the servicing of his mortgage,
which was originated by a subprime lender (ContiMortgage) that went out of business in 1999.

Fairbanks claimed Mr. Kenney was behind in his payments and threatened foreclosure. However, the former
corporate meeting producer who lives in Maryland, disputed those claims and started a crusade against the servicing company.

Mr. Kenney believes it was common practice for Fairbanks to take over servicing and immediately claim the
borrower had missed payments during the transfer.

The Community Law Center in Baltimore compiled a list of complaints filed against Fairbanks and noticed a similar
pattern.

The FTC and HUD are looking into allegations that Fairbanks was mishandling accounts and overcharging
homeowners. The company has denied the allegations.

Mr. Barr has a REO disposition company in Diamond Bar, Calif., called B.A.R.R., which standards for Bank Assets
Recovery Resources. He ran into problems with Fairbanks when the company took over a servicing portfolio from
CitiFinancial and cancelled his REO contract. He sued Fairbanks.

The two consumer advocates said the settlement with Fairbanks resolved "all outstanding litigation and other issues."